The $64,000 Question

A few weeks ago, I was at a fundraiser for my children’s school when I struck up a conversation with a friend, who then introduced me to a third person that I didn’t know before. We chatted a bit and then he learned that I wrote The Simple Dollar, so the conversation turned to the basics of personal finance.

He wanted to know what kind of investment advice I give, and I told him the truth: I’m pretty passive when it comes to investing and I believe the best investment gains come from not being wasteful with your money in your day to day life.

He asked for a few examples and so I talked about our life a little. We eat at home almost all of the time. We spend most of our free time doing things like reading or going on hikes or participating in sports. We basically view the sticker price of something as being a real negative against doing it, not just something to toss on the credit card and forget.

He thought about that for a minute and then asked the big question.

Doesn’t that kind of make for a miserable life? If you just say “no” to things just because they’re expensive, you’re cutting yourself off from a lot.

That’s a question I’ve heard in some form or another many, many times, and it completely misses the point.

Do What You Want to Do

For starters, if there’s something I really want to do, I do it. If there’s something that my family really wants, they have it.

We do not live any sort of deprived lifestyle. We enjoy great food. We enjoy lots of activities together as a family. We take at least one trip each summer. Each of us has several hobbies that we personally enjoy. My children have everything they could possibly need for any activity or interest they might have. I have a job that I enjoy. I have a low stress level (most of the time). Those are the things I want to be doing with my life.

We have full, rich lives. We do not lack when it comes to any of our needs or any of our biggest wants.

So, what’s the “catch”?

Expensive Things Have a Real Cost That Inexpensive Things Don’t Have

The “catch,” if there is one, is that Sarah and I both recognize that when we spend money on something, that’s a real cost that takes away from the other things we want in our lives.

If I spend $30 on a new board game, that’s $30 I can’t spend on something else that I want.

If Sarah spends $30 ordering seeds from Seed Savers, that’s $30 she can’t spend on something else that she may want.

If we choose to go out to eat as a family and spend $40 instead of the $10 a meal at home might cost, that’s $30 we can’t spend on something else for our family.

On the other hand, if I just play a board game that I already own, that $30 remains in my pocket and I still have a lot of fun sitting around the table with friends.

If Sarah uses some of her saved seeds from last year (or trades with some of her friends who also save seeds), that $30 remains in her pocket and she still has a beautiful and thriving garden.

If we choose to eat a meal at home, that $30 remains in our coffers and we still get to gather around the table as a family and share a wonderful meal.

In each case (and in many other cases in our lives), there is a less-expensive alternative to the thing we want to do that retains the fun with a serious drop in the cost.

The obvious question you’ll ask at this point is that, if we’re making choices like this, are we really doing whatever we want, whenever we want?


First of all, most of the things I choose to do with my time are already pretty cheap or free. I love to read. I love to go walking in the woods, whether it’s on a geocaching mission or just for the sheer joy of it. I love to play board games with friends. I love doing things with my family – almost anything is fun with them. Those things cost very, very little.

Whenever I have a desire to spend money, I recognize that there’s probably some sort of positive for my life. I want to spend money on this, so it’s something good, right?

Well, that’s not always the case.

Let’s look at Sarah’s seed collecting, for example. Rather than just spending $30 and ordering a bunch of seeds from a catalog, she instead chooses to spend a few hours hanging out with some of her friends that also practice organic gardening and swap some seeds with them. Instead of spending money, she gets a social activity instead, and the end result is the same – interesting seeds to plant.

What about my board games? I’m not interested in collecting board games. My enjoyment comes from spending time with friends around a table playing a game, mixing together a social event with the joy of a shared strategic exercise. That’s a lot of fun for me personally. Thus, unless I’ve really played through all of the games that I own – and I most definitely have not – then it doesn’t make a whole lot of sense to buy a new game when I have so many on my shelves that aren’t played out.

What about eating a meal at home? Sure, it’s fun to go out sometimes, but it loses something when you do it all the time. Most of the time, a meal is just a meal – something to sate hunger – and an opportunity to actually sit down with my family, together around a table, for twenty or thirty minutes.

I’m getting what I care about out of each situation without spending that money.

Because of that, I often view things like going out to dinner or buying more seeds as simply spending money without really improving my experience in any way.

The other part of that equation is that we still have that $30 in our pocket. That money can go toward things that we really care about. Not too long ago, we would have used that money to pay off debts so we didn’t have them breathing down our neck. Now that we’re completely debt free – not even a mortgage – our money is going toward financial independence, which essentially means that our investments provide us with enough steady income to live out the rest of our lives.

The message here is that if I think about what I really want out of most situations – and I also recognize that spending money is going to hinder my ability to have what I want in other situations – then that often points me to another “best” option.

If there were no drawbacks to spending that money, then ordering more seeds from the Seed Saver catalog might actually be the best choice for Sarah, but there is a drawback to spending that money. Because of that, the seed party is definitely better.

If there were no drawbacks to spending money, I might buy a new board game for every board game night. However, there is a drawback, so that moves the balance enough so that I don’t buy games all that often and would rather just replay most of them.

If there were no drawbacks to spending money, we might eat out for most of our meals. However, there is a drawback, so that nudges the balance away from eating out and toward eating at home, where I still get to enjoy a good meal sitting around a table with my family.

Cutting Up That Desire

A big part of this whole picture is realizing that the things that I want – and the things that I want to do – are borne out of a mix of desires that I have at any given time.

I love spending time with my family.

I love wandering around in parks and exploring the woods and camping (though, admittedly, I’m not too big on long hikes).

I love activities that make me think, whether it’s reading a challenging book or playing a board game.

I love spending time with friends that I’ve known for a long time and have a strong enough relationship with that I can let my guard down.

I can list tons of things that I love. I can list many more things that I like, though not with the same fervor.

Whenever I want something or want to do something, it’s usually triggered by a mix of all of those desires that I have. So, for example, when I convince my family to go geocaching on a warm Saturday afternoon, I’m doing it because I love spending time with them and I love exploring the woods and wandering in parks. Geocaching with my family manages to scratch both of those itches at the same time.

Here’s the tricky part: the reason that expensive things often seem “better” at first glance is that they usually do scratch a few more desires than the cheap option. However, the cheap version usually does have most of the elements of the expensive version.

When I think about going out to eat, for example, I usually envision a pretty good meal. I think about sitting around the table with my family. I think of the perk of having someone bring it to the table while we just sit there. If we haven’t done it for a while, it’s kind of a special experience because of the different environment. But I also think of the cost of it.

Then, I think about the experience of eating at home. It’s usually a pretty good meal, too. I also get to sit around the table with my family. Someone doesn’t bring it to the table for me, but it’s also $30 cheaper for my family.

So, for most nights, the “best” option is eating at home. It has almost everything I want from eating out without the minus of the expense. Sometimes, that “different environment” desire adds up to enough to flip it the other way, as does logistical challenges (like when we’re unexpectedly not at home and everyone is hungry).

As I said at the beginning, we do what we want.

The Perks of the Less Expensive Option

It’s not a big secret that once upon a time I was a huge spender. I spent far more than I earned and, over the course of a few years, caused myself to be slowly buried in debt until I finally reached a point when I knew I had to change things. We were headed in a very bad financial direction and if we wanted any of the big things we wanted in life – a nice home, freedom from being worried about debts and from being scared to check the mail – we needed to do things differently.

So we did what most people do when they hit financial bottom: we went ultra-frugal. We began to do everything in a price-conscious way. We barely went out. We ate extremely cheap. We tried very hard to avoid spending any money at all.

Sounds miserable? Well, in some ways, it was. It meant we didn’t do everything we want to do and it meant some radical shifts to our lifestyle.

However, there were two big positives to that change.

First, we began to realize that the “cheap” version wasn’t always terrible. As I noted several times above, the “cheap” way of doing things often retains most of what I actually enjoy about that thing. A cheap meal at home retains most of what I value about a meal eaten at a restaurant.

Before that, I focused only on the difference between the two things. Eating at home was nothing. Eating out meant a waiter or waitress brought a meal to your table that you didn’t have to prepare! No comparison, right?

When I stepped back and looked at the big picture, though, the meal at home had a lot of good things going for it, things that happened to be duplicated with the meal at the restaurant. When I eat at home, I get a good meal, with all of the flavors and aromas that it brings. I get to gather around the table with my family and any friends who happen to be there. I get some nice conversation.

Those features are present both in my meals at home and in restaurant meals.

Because of that, when I compare restaurant meals to meals at home, it no longer looks like a completely lopsided comparison. It looks like the restaurant features add up to just a bit more than the features of a meal at home, but it also comes with that price tag negative.

I guess the best way to summarize it is that I don’t look at it as a cheap glass that’s empty next to an expensive glass that’s full, but instead as a cheap glass that’s 90% filled next to an expensive glass that’s full. I’d always choose the full glass over the empty one, but I’ll usually choose the cheap 90% full glass over the expensive full one.

The other positive to that change is that we began to realize the lasting value of having your financial house in order.

Being in debt is subtly stressful. It’s not something you notice all the time, but it’s always there. It’s always adding a bit of stress to everything you do.

It makes your job more tense because you’re walking a financial tightrope. It makes checking the mail and seeing bills a bit of a nerve-wracking experience. It can make you sleep poorly and leave you thinking about your situation in those quiet moments, both of which lower your mood and energy.

When you choose to not spend money on the expensive option, you can then apply that saved money to reducing your debt. That slowly reduces all of those negatives in your life.

Naturally, we began to reduce our debt over time and, as that debt went down, our lives slowly became less stressful, personally, professionally, and in other regards. I started sleeping better. I started eating better. I started feeling better.

The positive direction of those things continued even as our debt melted away. I began to feel less and less tied to my job and under less direct pressure from difficult demands at work. I actually began exploring other career options and eventually made a rather radical career switch into something that paid a little less but offered the kind of personal flexibility I had always dreamed of. This would have been impossible before.

Once that threshold was crossed, other dreams started coming into focus. We paid off all of our debts. We began saving money at a very healthy rate. And, soon, other goals began to appear on the horizon.

We now measure our financial state in terms of how long we could survive if neither one of us worked and we had to live off of what we have banked, and the longer that time period, the better we feel.

I now look at the $30 described earlier in this article as either a step forward or a step back on that journey. If I choose to spend the $30, well, it’s a step backwards on that journey. It takes me farther away from where I want to be. It shortens the time period during which Sarah and I could live on our investments.

On the other hand, not spending that $30 is a step forward on that journey. It takes me closer to where I want to be. It lengthens the time period during which Sarah and I could live on our investments.

The Value of Little Steps

The natural response here is to wonder if that $30 really makes a difference. After all, it’s just $30 versus the mountain of money it will take to live out that dream.

You’re correct. It is a little step, one of tens of thousands I have to take on this journey.

However, the question I ask myself is this: is the value I’m getting from that restaurant meal or that new board game or whatever it might be really worth a step backward instead of a step forward? Am I really getting something that valuable from that extra cost?

Sure, sometimes, I am. Sometimes I give into whatever that thing is that I want in that moment. Sometimes we go out to eat at some great restaurant in Des Moines. Sometimes I buy that board game – and sometimes I even spend too much on my hobbies.

Most of the time, though, I recognize that the difference between the meal at home and the meal at the restaurant really isn’t worth that step backwards. I get almost all of my enjoyment out of a meal by simply having my family around me and having something palatable on my plate. I can get that at home and also take a step forward on my journey, which brings even more joy.

Similarly, the difference between having a new board game and just bringing out an old favorite game on one of our game nights also isn’t worth that step backwards. I get almost all of my enjoyment out of those game nights simply from sitting around the table with friends and having some game that we’re all playing together that captures my mind a bit and makes me think. I can get that with an older board game and still take a step forward on my journey, which adds to the joy.

I know that each of those steps forward is adding to the security of my family – and that feels good.

I know that each of those steps forward is bringing both Sarah and I closer to the point where we don’t have to work for an income – and that feels good.

For me, those things provide a pretty compelling addition to that 90% full cup that I described earlier, more than enough to make it the better choice for me.

Final Thoughts on a Full Life

So, do I live a full life? Absolutely. Sarah and I do basically anything we want to do. The only thing that’s different is that we’re aware of what it actually costs us to do expensive things, which sometimes makes those expensive things seem less appealing to us.

That’s good, because it turns out that we actually enjoy a lot of pretty cheap and free things anyway – things we’d choose to do regardless of the respective costs.

In the end, I live a great life. I don’t feel a bit restricted on what I choose to do and I wake up feeling pretty happy about things almost every day.

I call that a real victory.

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